Milk supply up in 2021, says AHDB

Despite the disruption to food markets by coronavirus early in the year, dairy markets recovered quickly and remained surprisingly robust through 2020, says Patty Clayton, lead analyst, dairy at the UK’s Agricultural and Horticultural Development Board (AHDB). This resulted in better than expected growth in milk deliveries, which are estimated to have increased by just under 4.9 billion litres (1.7%) in 2020 compared to 2019.

Government support packages were put in place in most of the key dairy producing regions, protecting consumption of dairy through income support or direct purchases.

The EU and Argentina experienced much higher growth rates than predicted, although all regions except Australia outperformed forecasts.

Latest forecasts continue to predict growth in global milk supplies for 2021, although at a lower rate than last year. Expectations of economic recovery and the return of foodservice demand as vaccines are rolled out is underpinning this growth. Risks to growth are tightening farm margins in South America and potentially lower import demand from China.

In total, milk production is estimated to increase by around 1% in 2021, increasing total supplies by 3.1bn litres.

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